27 April 2015
4QFY15 Results Update | Sector:
Oil & Gas
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Free float (%)
TP: INR190 (+14%)
Tax write-back boosts reported PAT; operationally below estimates
PLNG’s reported PAT at INR3b (est INR1.5b) was boosted by INR1.3b tax reversal
led by favourable ruling on its 80-IA tax benefit.
However, EBITDA at INR2.2b (est INR3.5b; -43% YoY, -35% QoQ) was significantly
below est. led by (a) lower Dahej volumes at 93tbtu (est 131tbtu; -20% YoY, -34%
QoQ) impacted by sharp cut in long term volume off-take and (b) negative
marketing margins on spot volumes at USD-0.24/mmbtu (v/s +0.55 in 4QFY15 and
-0.12 in 3QFY15).
Dahej utilization at 74% in 4QFY15; Kochi reloading revenue begins
Dahej re-gas volume at 93tbtu include 60tbtu (-35% YOY, -36% QoQ) long-term,
20.8tbtu (5.5x YoY, -26% QoQ) third-party and 12tbtu (-40% YoY, -32% QoQ) short
Lower long term volumes: RasGas off-takers exercised 10% annual lower volume
flexibility. This was led by lower demand due to higher RasGas LNG price at
USD12/mmbtu v/s spot LNG of USD7-8/mmbtu and competitive liquid fuel prices.
As most of the 10% flexibility is exercised in 4QFY15, expect volumes in
subsequent quarters to be higher. PLNG earnings are also protected by take-or-
While the Kochi pipeline (Mangalore/Bangalore line) construction bottleneck
continues, PLNG earned INR600m from Kochi reloading services (6.9tbtu) thereby
limiting FY15 PBT loss at INR400m.
Dahej to expand to 17.5mmt, expansion to 15mmt to end by 2016
PLNG board approved further expansion of Dahej capacity to 17.5mmt. Expansion
to 15mmt is likely to complete by end-2016.
Valuation and View
We are marginally (1-2%) cutting our FY16/17 EPS to factor in lower volumes,
partly compensated by lower tax rate.
The stock trades at 12.3x FY17E EPS of INR13.6. Maintain Neutral with price target
of INR190/sh (FY17 basis) as we believe current valuations adequately factors
near-medium term growth.
Avg Val (INR M)/Vol ‘000 343/1,887
Financials & Valuation (INR Billion)
2015 2016E 2017E
395.0 405.3 385.4
EPS Gr. %
Payout (%) 23.4
(HarshadBorawake@MotilalOswal.com); +91 22 3982 5432
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